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Is Hartford Capital Appreciation A (ITHAX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Large Cap Blend fund might consider looking past Hartford Capital Appreciation A (ITHAX - Free Report) . ITHAX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

ITHAX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a 'buy and hold' mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.

History of Fund/Manager

ITHAX finds itself in the Hartford family, based out of Woodbury, MN. Hartford Capital Appreciation A made its debut in July of 1996, and since then, ITHAX has accumulated about $4.81 billion in assets, per the most up-to-date date available. The fund's current manager, Thomas Simon, has been in charge of the fund since December of 2016.

Performance

Of course, investors look for strong performance in funds. ITHAX has a 5-year annualized total return of 11.91%, and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 16.81%, which places it in the bottom third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. ITHAX's standard deviation over the past three years is 13.22% compared to the category average of 12.08%. Over the past 5 years, the standard deviation of the fund is 15.9% compared to the category average of 13.5%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.99, so it is likely going to be as volatile as the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -4.69, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.

As of the last filing date, the mutual fund has 79.52% of its assets in stocks, with an average market capitalization of $543.86 billion. The fund has the heaviest exposure to the following market sectors:

  • Technology
  • Finance

Turnover is 104%, which means, on average, the fund makes more traders than comparable funds in a given year.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, ITHAX is a load fund. It has an expense ratio of 1.04% compared to the category average of 0.92%. Looking at the fund from a cost perspective, ITHAX is actually more expensive than its peers.

Investors should also note that the minimum initial investment for the product is $2,000 and that each subsequent investment needs to be at $50.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Hartford Capital Appreciation A ( ITHAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Hartford Capital Appreciation A ( ITHAX ) looks like a somewhat weak choice for investors right now.

Your research on the Large Cap Blend segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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